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Apple expects year-over-year revenue growth to accelerate in the fiscal fourth quarter compared with the third quarter (the June-end quarter) despite approximately 600 basis points of unfavorable year-over-year impact from forex.
The Zacks Consensus Estimate for revenues is currently pegged at $88.47 billion, indicating growth of 6.13% from the year-ago quarter’s reported figure.
The consensus mark for earnings is currently pegged at $1.26 per share, up by a penny over the past 30 days and indicating a 1.61% increase from the figure reported in the year-ago quarter.
Apple’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and came in line with the remaining one, the earnings surprise being 5.67%, on average.
Let’s see how things have shaped up for the upcoming announcement.
Steady iPhone 13 Demand to Drive Y/Y Sales Growth
Apple’s fortunes are heavily reliant on iPhone, which is by far its biggest revenue contributor. The device accounted for 49% of net sales in the last reported quarter, wherein sales increased 2.8% year over year to $40.67 billion. Our iPhone sales estimate stands at $45.30 billion.
Apple is expected to have benefited from steady demand for the 5G-enabled iPhone 13, despite silicon shortages. The company anticipates supply constraints to be lower in the fiscal fourth quarter than that in the third quarter.
The Zacks Consensus Estimate for iPhone sales currently stands at $42.76 billion, indicating 10% growth from the year-ago quarter’s reported figure.
Services Growth to Slow Down in Q4
Apple expects Services revenue growth to be lower than the June-end quarter due to challenging macroeconomic conditions and unfavorable forex. In the fiscal third quarter, Services revenues grew 12.1% from the year-ago quarter to $19.60 billion and accounted for 23.6% of sales.
Nevertheless, an expanding paid subscriber base has been a key catalyst for the Services business, which is riding on the increasing popularity of the App Store.
Apple currently has more than 860 million paid subscribers across its Services portfolio. App Store continues to grab the attention of prominent developers from around the world, helping the company to offer exciting new apps that drive traffic.
Services like Apple TV+, Apple Arcade, Apple News+, Apple Card, Apple Fitness+ and Apple One bundle are expected to have contributed to overall growth.
Apple TV+ has been gaining recognition due to award-winning shows despite strong competition from Netflix (NFLX - Free Report) , as well as services from Disney (DIS - Free Report) and Amazon (AMZN - Free Report) .
Meanwhile, Apple TV+ has surpassed 6% global market share, up from 5.6% reported in March. It is now chasing HBO Max, which has a market share of 7% (unchanged from March).
Apple has been keeping no stone unturned to make TV+ service a success. At a much affordable price of $4.99, Apple TV+ has been benefiting from quality content with its strong portfolio of original shows and movies.
Our estimate for fiscal fourth-quarter Services net sales is pegged at $19.14 billion. The consensus mark for the same is currently pegged at 19.73 billion.
Wearables’ Growth to Remain Strong
Apple has been dominating the wearables market, thanks to the strong adoption of the Apple Watch.
Notably, Fitness+ tracks health- and workout-related data from Apple Watch that users can view on their iPhones, iPads or Apple TVs.
The addition of healthcare features has been another game changer for Apple Watch. The Series 7 model offers a Blood Oxygen app, ECG app, high and low heart rate notifications, irregular heart rhythm notifications, and fall detection.
Apple Watch’s adoption rate has been growing rapidly. More than two-thirds of customers, who purchased it in third-quarter fiscal 2022, were first-time customers.
The Zacks Consensus Estimate for Wearables, Home and Accessories revenues is pegged at $9.24 billion for fourth-quarter fiscal 2022, indicating growth of 5.2% from the figure reported in the year-ago quarter. Our estimate for Wearables, Home and Accessories revenues stands at $7.96 billion.
Key Quarterly Highlights
In the to-be-reported quarter, Apple unveiled four iPhone models — iPhone 14, iPhone 14 Plus, iPhone 14 Pro and iPhone 14 Pro Max — at its product launch event.
Apple also launched the next-gen Airpods Pro, the Apple Watch Series 8, the new Apple Watch SE, Apple Watch Ultra and updates to Fitness+ at the event.
On Sep 13, Apple announced that the Apple TV+ show, Ted Lasso, won an Emmy for Outstanding Comedy Series. Jason Sudeikis also won an Emmy for Lead Actor.
At this year’s Emmy, Netflix won 26 awards but trailed HBO Max, which won 38. Apple TV+ won seven awards, whereas Disney+ and Amazon Prime Video won six each.
Image: Bigstock
Apple (AAPL) to Report Q4 Earnings: What's in the Offing?
Apple (AAPL - Free Report) is set to report fourth-quarter fiscal 2022 results on Oct 27.
Apple expects year-over-year revenue growth to accelerate in the fiscal fourth quarter compared with the third quarter (the June-end quarter) despite approximately 600 basis points of unfavorable year-over-year impact from forex.
The Zacks Consensus Estimate for revenues is currently pegged at $88.47 billion, indicating growth of 6.13% from the year-ago quarter’s reported figure.
The consensus mark for earnings is currently pegged at $1.26 per share, up by a penny over the past 30 days and indicating a 1.61% increase from the figure reported in the year-ago quarter.
Apple’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and came in line with the remaining one, the earnings surprise being 5.67%, on average.
Apple Inc. Price and EPS Surprise
Apple Inc. price-eps-surprise | Apple Inc. Quote
Let’s see how things have shaped up for the upcoming announcement.
Steady iPhone 13 Demand to Drive Y/Y Sales Growth
Apple’s fortunes are heavily reliant on iPhone, which is by far its biggest revenue contributor. The device accounted for 49% of net sales in the last reported quarter, wherein sales increased 2.8% year over year to $40.67 billion. Our iPhone sales estimate stands at $45.30 billion.
Apple is expected to have benefited from steady demand for the 5G-enabled iPhone 13, despite silicon shortages. The company anticipates supply constraints to be lower in the fiscal fourth quarter than that in the third quarter.
Per the latest Canalys report on worldwide smartphone shipments, Apple expanded its market share to 18% in third-quarter 2022, trailing Samsung’s 22%.
The Zacks Consensus Estimate for iPhone sales currently stands at $42.76 billion, indicating 10% growth from the year-ago quarter’s reported figure.
Services Growth to Slow Down in Q4
Apple expects Services revenue growth to be lower than the June-end quarter due to challenging macroeconomic conditions and unfavorable forex. In the fiscal third quarter, Services revenues grew 12.1% from the year-ago quarter to $19.60 billion and accounted for 23.6% of sales.
Nevertheless, an expanding paid subscriber base has been a key catalyst for the Services business, which is riding on the increasing popularity of the App Store.
Apple currently has more than 860 million paid subscribers across its Services portfolio. App Store continues to grab the attention of prominent developers from around the world, helping the company to offer exciting new apps that drive traffic.
Services like Apple TV+, Apple Arcade, Apple News+, Apple Card, Apple Fitness+ and Apple One bundle are expected to have contributed to overall growth.
Apple TV+ has been gaining recognition due to award-winning shows despite strong competition from Netflix (NFLX - Free Report) , as well as services from Disney (DIS - Free Report) and Amazon (AMZN - Free Report) .
Per a report by JustWatch, cited by 9TO5Mac, Netflix remains the leader with 27.3% market share, followed by Amazon prime video and Disney+, with 24.3% and 18.2% market share, respectively.
Meanwhile, Apple TV+ has surpassed 6% global market share, up from 5.6% reported in March. It is now chasing HBO Max, which has a market share of 7% (unchanged from March).
Apple has been keeping no stone unturned to make TV+ service a success. At a much affordable price of $4.99, Apple TV+ has been benefiting from quality content with its strong portfolio of original shows and movies.
Our estimate for fiscal fourth-quarter Services net sales is pegged at $19.14 billion. The consensus mark for the same is currently pegged at 19.73 billion.
Wearables’ Growth to Remain Strong
Apple has been dominating the wearables market, thanks to the strong adoption of the Apple Watch.
This Zacks Rank #3 (Hold) company’s Fitness+ subscription service, built on Apple Watch, has been a game changer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Notably, Fitness+ tracks health- and workout-related data from Apple Watch that users can view on their iPhones, iPads or Apple TVs.
The addition of healthcare features has been another game changer for Apple Watch. The Series 7 model offers a Blood Oxygen app, ECG app, high and low heart rate notifications, irregular heart rhythm notifications, and fall detection.
Apple Watch’s adoption rate has been growing rapidly. More than two-thirds of customers, who purchased it in third-quarter fiscal 2022, were first-time customers.
The Zacks Consensus Estimate for Wearables, Home and Accessories revenues is pegged at $9.24 billion for fourth-quarter fiscal 2022, indicating growth of 5.2% from the figure reported in the year-ago quarter. Our estimate for Wearables, Home and Accessories revenues stands at $7.96 billion.
Key Quarterly Highlights
In the to-be-reported quarter, Apple unveiled four iPhone models — iPhone 14, iPhone 14 Plus, iPhone 14 Pro and iPhone 14 Pro Max — at its product launch event.
Apple also launched the next-gen Airpods Pro, the Apple Watch Series 8, the new Apple Watch SE, Apple Watch Ultra and updates to Fitness+ at the event.
On Sep 13, Apple announced that the Apple TV+ show, Ted Lasso, won an Emmy for Outstanding Comedy Series. Jason Sudeikis also won an Emmy for Lead Actor.
At this year’s Emmy, Netflix won 26 awards but trailed HBO Max, which won 38. Apple TV+ won seven awards, whereas Disney+ and Amazon Prime Video won six each.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.